i hope that's true for all of you. here's the good news, though. in just a few days, we start 2013. we start a brand-new year where you have another chance to get this right when it comes to your money. we're going to have a new year and new you. we're going to be together. we can do this, people. but from all of us here on "the suze orman show," we wish every single one of you a very, very, very happy new year. we thank you for watching us. we thank you for sticking with us all these years and we can't wait to do it again next. now you know. but until then there's only one thing that i really want you to remember when it comes to your money and it is this. people first, then money, then things. now you stay safe. bye-bye.

this is options action. tonight, money in the bank. financials soar in the new year. if you miss a rally, fear not. dan nation has a love in citi that can make you some money if the stock goes up, down or nowhere at all. he'll break it down. plus, heavy metals. gold and silver see their worst week in eight years. some say the pain is just starting. we'll tell you where they see them heading next. how you can profit. and retail has been a wreck. why were all those traders piling at the heavy call? the action begins right now. live from new york city's time square, i'm melissa lee. let's get into the options action right thou. stocks hitting five year highs, closing at levels not seen before. is it too late to get in? how should you position your portfolio?

let's get into the money and find out. it is amazing the progress we've seen in terms of the rally this year. is s&p 500 is within 6% of its all-time closing high at this point. 4%. >> we were saying similar things last year. the rally just in the last few days, has been, it feels a lot stronger than it is. we're up 3% in the s&p and the nasdaq. if you shorted those couple days, you you were kind of hurting through january and february. so, in a lot of ways, you know what i mean, you have to wait to be a little contrarian here because at some point, the seasonality kicks in and you can get carried away. >> look at retail sales numbers, kind of tepid, not a lot of enthusiasm. a lot of people were somewhat underinvested. we had concerns over fiscal cliff issues which i think have been pushed out a little bit. i can see the market leveling out here as people are reinvesting. but i don't feel overwhelmingly enthusiastic.

do i think we could stretch it further? sure. but still serious concerns on the horizon? absolutely. when we talk about the debt ceiling debate, i think we'll see that come to pass. >> dan doesn't feel like the rally was that strong. i think it was incredibly strong. we had a strong catalyst behind us. vix loves to go down when we get behind the catalyst or when the market rallies. and the market, we've done both of those things this week. the vix just got crushed. with the market at a five-year high, should i buy protection? when the vix is low and the market's high, is a little bit like buying life insurance. i write that check every year, it's never paid off. doesn't mean it's a bad trade. it doesn't mean i'm unhappy. >> i would side with scott in terms of the rally being strong. two huge days of gains and no huge pullback. that would be been the easiest price action. >> i guess my point is, we were sitting at 1400 a few days ago when the debt ceiling debate was at its fury here. we went quickly from support to

resistance here. we did go in a straight line. the question was, do you chase the air? i think not. we'll get into earnings seasons in earnest. at this point, q-4, there's a couple things there. there's sandy and debt ceiling. we'll see corporate management refer to those two things a lot. but forward guidance. this is what stocks will trade on. we'll know quickly what that looks like for the first half of the year. >> one quick point about the vix statistic. it can be deceptive. when the vix is relatively low, 16, 17, and declines to 14, that seems like a big move. take a look at one of the data points there. looking at october of 1987, that was when we had a market crash, one of the largest ones ever. so seeing a significant outperformance of the market coming off the heels of that, not really what we're looking at. we're not in the same position that we were in late october of 1987 today. we're coming off a rally, not market crash. >> i know the year is young, but what led us higher last year are

primarily leading us higher this year. financials and housing up 4%. specifically for financials, there have been so many analysts coming out this week specifically getting bullish on finances, upgrading the likes of citi, after the stock is up 20%, dan? >> these are cheap stocks. they were cheap 70% ago. bank of america is 100% from the lows early last year. so they're cheap stocks. they have a lot of leverage in the models. they're selling assets, cutting cost, doing a lot of things. so earnings growth can and will regain some steam that it had pre-crisis. that's the key. they're not short-term calls. they're not saying, i think it's going up 10, 20% in the next few months. you're saying, i think they can double over the next few years. that's where the enthusiasm is. >> that's where you get concerned. >> i get concerned in the near term. goldman put out the buy list -- not the buy list they sago out and buy. >> this is the, i really believe

in this. >> yes. they replaced jpmorgan with it. to me, we have had a number of upgrades, a management change, they announced restructuring. when they reported in mid october there was a lot of metrics. they were doing a lot better here, but less bad than before. so i think the set-up with volatility in particular, not a stock i would short here, but the set up is interesting to their january 17th earnings announcement. >> dan is bearish. he's buying up put calendar. this is where you buy one and sell it to reduce your costs. the goal, you want the stock to stay above the strike of the put you sold at the first expiration but sell beyond the second expiration. so the stock would require some timing. >> this is the beauty of option. i wouldn't short the stock, but the set-up, if volatility in january is below the 30-day and the 60-day, there's opportunities here.

i play for quick consolidation and a pullback after earnings. so today when the stock was $42, i bought the january 11th, next friday, january 19th, the following friday, 41 put calendar. what did i do? sold one of the january 11, 41 puts at about 20 cents and i bought one of the january 19, the two fridays from now, put for 55 cents. that cost me 35 cents. that's my max risk. what do i want it to do my next friday? i want the stock to close at 41 or slightly higher and have that put expire worthless. then own the january 19th 41 put for 35 cents. again, that's my max risk. i want to own that put for the january 17th earnings event. two days of expiration. i will look to spread it if it pays out. >> i will say one thing, i wouldn't want to short citi, i think it's trading about 80% of

tangible book, 20% discount to the s&p financials. here's the thing. i also agree that the market's probably going to trade sideways. the only thing is, with options cheap as they are, i wonder if buying puts isn't a good trade here. otherwise you're trying to find the sweet spot. i think that flat out i think buying puts right now is probably as attractive price wise as it's been in 12 months. >> right. >> especially with the way the market is set up. >> i think mike is right. you're not going to have any time to make this work as far as earnings are concerned. i like a calendar -- one reason i wouldn't do this, citi was really strong in the last hour of the day. i know you didn't get a chance to see that before you put that on. i like the space in general. afraid of a pullback, but i like the space. >> you can buy them, but i'm trying to play here and finance that put. >> let's wrap it up.

citi better have a lot of money in the bank. dan's put calendar can make money whether citi goes up or down. he is hoping for it to go down by the second expiration and his trade risks just $35. it's the other big story today, gold and silver losing serious luster. the firmer dollars sending gold and silver to their worst losing streaks in over eight years. is there more pain in store, especially for silver? let's call to the charts the man who tears up watching reruns of silver spoons, carter braxton. carter, kidding aside, you did correctly call the crash of silver in april of last year. what do you see now? >> what's important it's not just silver, it's gold, it's the yen, it's all things that are considered safe havens, they're coming apart. here's a daily chart going back two years. what's important about this is the level here. we're on the cusp of breaking these well defined intermediate

lows. we closed $30 down. we think we're dropping as low at 20. take a look at this same chart, but longer term. what's important about this is we're right on the trend line that's been in effect since the '08 lows. that's not good to bounce off the trend line, fail to bounce convincingly and come back to it. >> then finally, just citing what you referred to earlier, together in the show, we talked about this epic top and how it was symmetrical. the presumption is once it fails, it doesn't end halfway. it retraces much more of the original where gold and silver made their high in the early '80s. so really lower from here, considerably. >> carter is clear on this mike, what do you think? >> i've never been a precious metals bug. i can understand why people are trying to buy hard assets. from a fundamental point of view, it's a little more challenging. we have reasons to be skeptical

about silver. the debt ceiling debate, not the least of these. the reason to buy is they preserve real money. but if we have real pressure where the republicans in congress, you could see reductions in spending. that in turn could put pressure on the precious metals. i think that's one point. another point, silver is looking a bit pricey relative to gold. there's usually a relationship close to 60 times. right now we're stretched in that standpoint. i think if we could see it normalize to where gold s that's a 6% pullback as well. when i take a look at it, i'm not enthusiastic. the other thing, the long-term chart shows you how cheap options are. i'm going to buy a put on this one. >> he's buying a put. this is the simplest trade you can put on. let's open the playbook because it's good to see how it works. when you buy a put, you want the stock to go down by more than the cost of the trade.

that's where you see profits. above that level, you'll see losses. that simple. >> march 28 puts cost 85 cents, buy outright, look for opportunities to spread them. you had the fed telling you they might be running back qe, good time to be bearish in silver. the options are cheap. i wouldn't look to spread it until you got a move. just because you're spending less than 3% of the cost of silver here. i think that's pretty inexpensive way to make the bet. >> this makes all the sense in the world. if you look at the first chart, this is one of the few situations where a trader is happy to sell the bottom. why? if it goes through, it's going to go through by a ton. mike makes the case that there's asymmetry of risk. that it's likely to go down more than it's going to go up. he can buy puts inexpensively. we don't often by an outright put. but there's no reason to get cute and spread here when you can make a ton of money and you

don't want to sell yourself short by selling a downside put. >> that is one of the worst looking charts in the planet. >> on the planet. >> get in there and just buy the put. >> one more time on stocks versus options. shorting stocks or etfs can ruin your portfolio and it can be painful. mike's put perch offers leverage to the down side and risks just $85. send us a tweet at cnbc options. we'll answer it right after the show. yes, options action has been revamped. you'll find great trader blocks, educational material, check it out. here's what's coming up next. talk about an oscar-worthy trade. >> you like me! >> last month cohen carder teams up for a bullish trade on netflix that has been nothing short of a blockbuster and they have a way to make even more. will the sequel be as good as the original?

find out when "options action" returns. time for pump up the volume. the names that were heating up the sizzle index this week. a dollar and a dream. that's all you need to buy anything in one of this discount retailer's stores. this week they bet dollars to doughnuts that the company would report impressive earnings. unfortunately the numbers were a dollar or two short. leaving these traders trying to pass the buck. what company are we talking about? we'll tell you when "options action" returns. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim.

from td ameritrade.

♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim

from td ameritrade. ♪ where were traders pumping up the action this week? family dollar. at one point, call volume was 13 times its average daily value. >> you just heard how family dollar calls were active. scott, this was a very tough week for the stock. >> absolutely. we saw a bunch of call buying on wednesday in front of earnings. we saw people who wanted to get long, define their risks. big buyers, 65 calls. those didn't work out. but if you're going to define your risk and you want to bet that the market's going higher, or the stock is going to go higher, this was the call to buy. because it was at at the money call. >> time now for the upside call. a few weeks back, cohen carter made a bullish trade to netflix, netted pretty nice gains, but they made a lot more and here's how. on "options action" it's how we trade like wall street legends, risk less so we can make more

and that's just what mike and carter did with their bullish bet on netflix. carter thought they were set to net some gains. >> be in things that are working. this stock is working. >> mike thought hmm. the man makes a good case, but i'm still not convinced. but then he remembered the words of his personal hero carl icon. >> i believe that this company is undervalued, as i said. >> hotdog, mike thought. if carl and carter are buying, so am i. but there was a problem. 100 shares cost nearly eight grand. mike ain't got carl icon kind of money. so to spend left, they sold the january put for 4.10. that's the most he can make on the trade, but in order to keep all that money, mike used netflix stock to stay above the strike of the put that he sold or in this case, above $80 by january expiration. below $80, profits trail off.

but with the money mike collects, he won't see losses until netflix follows below the strike of the put that he sold by more than the $4.10 he's taking in, below $75.90 by january expiration. he can do something even carl cant, make money whether the stock goes up, down or nowhere at all. >> i think he's done an excellent job. >> relax, there's a catch. he's now obligated to buy at $80, even if it falls below that level. no worries. since the time of the trade, shares have surged over 10%, making this trade a winner. now these three find themselves unlikely partners with a common goal, hoping netflix goes higher. "options action" fans want to know one thing, what will these two deal makers do now? before we answer that, let's see how much money was made. mike collected $410 from selling that put.

if he bought it back today, it would cost him $20, profit of $390. carter got us in. where is it going next? got a cal call back to the charts. >> we would be inclined to stick with this. this stock over the last few years has been destroyed. it's early recovery we think lots of upside. 110. >> all right. stick with it. what do you say, mike? >> it's fine to say bullish on the stock, but not at that put. you only have the opportunity to make another 20 cents on this thing. i would cover the put, anybody who sold this may have done this already. we've made the lion's share of the $4.10 we can already collect. >> right. what's interesting about netflix is showing a lot of the stocks have been beaten down at the end of last year are now becoming treasure. they've seen nice gains. this week alone, the best performing 20 stocks of the s&p 500 this week and a few of them were technology stocks. dell and hewlett-packard stood out with 10% gains this week alone.

dan? >> there's nothing good fundamentally going on at either of those companies. facebook is a different story in a lot of ways. there's a lot of hope in that name. a lot of guys for technical reasons, that stock was beleaguered by overhang last year. now we don't see the overhang for a while, at least in the same quantity. so a lot of guys are coming out of apple into facebook. they see an entire year to make some money in a name that may have a lot of revenue leverage. >> i think it's hard with all of the names we were looking at, hard to make a strong fundamental case. facebook on a valuation basis. hewlett and dell, because of their ongoing business model. i think it's troubling. when you have stocks like hewlett beaten like they were, a lot of times you'll see them bounce hard and far off the bottom. so we saw a lot of call buy income hewlett this week. as a result of that, people are

speculating it's a leveraged upside bet. >> going to carter again just to get a view on where technology is. what do you see in the charts there? >> the issue with technology because it's burdened by its largest cap components. microsoft, intel. the roadblock problem with the sector, its biggest components act poorly, two, still the biggest waiting in the s&p. it's 18.5%, too much money in that area. >> carter makes a great point on apple, still remains beleaguered. you made a point with the rotation coming out of apple. when it was declining from its all-time high in september, people were saying -- it's 2013 now and it's still not back. >> step in and buy it at $180 discount to where it was. i think people were worried as far as products were concerned apple tv is the only thing people are waiting for. mike makes a great point over hp and dell. those are hated and probably overhated and just gotten debt

camp -- >> carter made this in the break. with stocks like apple disconnecting from the market, that's a bullish sign. the fever's broken there, let the market trade on its own right now. >> thanks to carter braxton of oppenheimer. reminders, if you want updates on trades, follow us on twitter and cnbc options. and dan posts his trades on twitter. if you're on facebook, stay posted on the trades throughout the week at facebook.com/options action. coming up next, the final call in a shocking video that you will not want to miss. >> what's your best option? following us on twitter. get trade updates, breaking news and analysis. see what we see in realtime. follow us on twitter at cnbc options. get more options action with our newsletter. delivered directly to your inbox. packed with exclusive information and analysis, this is the extra edge you need. it's free when you register, or visit the member center at cnbc.com. ♪

[ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade.

♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ]

♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ >> an 11-year-old girl has taught her cow a new trick. inspired by a youtube video, he

taught her cow to leap like a horse. it reportedly took a year of training to make the heffer hop, but these images will last a lifetime. was it really worth it? a year, really? time now for the final call. scott? >> s&p five-year high, vix is low. buying protection may not be profitable but it's not wrong. >> dan? >> citi, no matter what the directional bias is, options are cheap. >> mike? >> silver bounces around a lot, but the options are inexpensive, definitely wouldn't want to short it. >> look, it looks like our time has expired. i'm melissa lee. thanks so much for watching. go to our website for more information. we'll see you here next friday. "money in motion" is up right after this break. ♪

[ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade.